This week, Netflix upped the ante against Verizon by displaying a message when a stream breaks off (and buffering, or the preloading of data, takes place before the program is resumed): "The Verizon network is crowded right now. Adjusting video for smoother playback."

The standoff between the companies is curious given that Verizon and Netflix actually signed a commercial arrangement in April, which should improve Netflix performance on Verizon's network. Apparently, Netflix is still unhappy about the outcome of that deal.

"This is about consumers not getting what they paid for from their broadband provider," a Netflix spokesman said in a statement. "We are trying to provide more transparency, just like we do with the Netflix ISP Speed Index, and Verizon is trying to shut down that discussion."

Netflix said the message it's been displaying is part of a test that began in May to notify subscribers of how their service quality is being affected by congestion. A few hundred thousand US Netflix customers are part of the test.

Comcast and Verizon argue that the issue is related to a business standoff over fees, while Netflix accuses them of double-dipping by charging both consumers and services, such as Netflix, for access to their network.

Recently, the issue has become entangled with the controversial Net neutrality regulation currently being drafted by the Federal Communications Commission, which has stirred strong emotions among consumers who have called on the government to ensure that Verizon and other large ISPs don't abuse their power over networks.

The tit-for-tat blame game has been going on between Netflix and Verizon for several months now. In an effort to reveal each side of the story in more detail, CNET offered the companies the chance, via separate Q&As, to explain what's really happening. Verizon's David Young, the company's vice president of federal regulatory affairs, agreed to an interview. Netflix declined to make anyone available, only providing the statement above.

Below is an edited excerpt of the talk between CNET's Marguerite Reardon and Verizon's Young.

Q: Is Verizon throttling Netflix?Young: Netflix is not being throttled. What seems to be occurring is that there is congestion on the connection between Netflix and our network, which is what is causing the video to buffer for some Verizon Fios subscribers.

But Netflix says Verizon is controlling that connection and as a result is limiting access to Verizon Fios customers. So isn't that really throttling?Young: No it's not throttling. Let me explain it this way, using an example. Let's say you have an ISP that is providing service to end users and it also provides Internet service to a business. This business has a very popular service that many of the ISP's customers want to use. There are so many people trying to access this service that it overloads the connection the business has subscribed to from the ISP.

Who is responsible for upgrading that connection? Should the ISP pay the cost of upgrading that business's connection, which is being overwhelmed because its service is so popular? Or should the business pay the cost of upgrading that connection to satisfy the requirements of delivering a suitable service to its customers?

I don't think the ISP is responsible for providing a free upgrade to that business to ensure its service runs properly.

That is what is essentially being asked of Verizon. Somehow the ISP is being asked to ensure that any site on the Internet is able to satisfy the demands of any business on the Internet for free, if those businesses need additional capacity to satisfy customer demand.

That's not practical. The ISP has a duty to ensure there is enough capacity for its broadband customers to reach these services. But the Web-based business also has the responsibility to subscribe to a service with enough capacity to meet the demands of its customers. It involves both sides.

I'll admit that is a simplified explanation. In reality, the Internet is not as simple as I just described. It's not just one network. It's actually made up of many networks connected to each other. In the case of Netflix and other businesses that generate a lot of traffic, they pay to have their content delivered over multiple networks. They can deliver it themselves or pay intermediaries like content delivery networks to deliver it for them. You did a great job explaining how this works in a recent CNET article.

Netflix has so much traffic, it has found that it's more cost effective to connect directly to ISPs. Their Open Connect service should offer subscribers a better experience, because it reduces the overall congestion on those CDN links, which are also carrying other types of traffic.

Verizon actually struck a deal with Netflix in April. Did this deal involve Netflix connecting directly to Verizon via its Open Connect program?Young: That is correct, we did reach a commercial arrangement with Netflix. But the terms of our agreement are confidential, so I can't go into detail about what it involves. I can tell you the end result is that they will have a direct connection to our network with adequate capacity to satisfy the needs of their subscribers.

If you already have a deal with Netflix in place that you say has fixed the issue, why are some Fios broadband customers still experiencing poor Netflix streaming?Young: Well, we can't just snap our fingers and the network is upgraded. We need new facilities. We have to do the equipment engineering. Build it and test it. We are doing all of that right now. And it should be completed during this year.

The reality is that we have a deal in place to handle these issues. So who is at fault is really a moot point. We both recognize that customers will be better off with a direct connection. And that's what we are in the process of implementing.

So were you surprised when Netflix started posting this message to subscribers that essentially lays all the blame for any buffering and congestion on Verizon?Young: Yes. We each acknowledged that there had been a problem. And we agreed to fix it. So it was very surprising to me that they would do something like this. I don't know what purpose it serves.

A Verizon spokesman said the other day that this was a PR stunt. Do you really think that may have been the motivation?Young: I honestly don't know. Don't they say there's no such thing as bad publicity? But to be truthful, I really don't understand the objective. You'd have to ask Netflix.

Is it even possible to know for sure whether the congestion issue can be blamed solely on Verizon?Young: That's the thing. From a technology perspective, there is no way to know if the degradation was caused by congestion on our network or the fact that someone is trying to stream a movie on their tablet while sitting in their backyard where they are getting a weak Wi-Fi signal. If it's a Wi-Fi issue, that's clearly not a problem with Verizon's network. But you will likely see some buffering, and I assume that this message would pop up.

Verizon and other broadband providers sell different tiers or speeds of service. Why should I upgrade my broadband connection if that doesn't guarantee that services like Netflix will run smoothly?Young: People are using more and more devices simultaneously on broadband connections, from smartphones and tablets to computers and smart TVs. All these devices work simultaneously on the network.

You are correct that a higher speed connection doesn't necessarily mean that a streaming service like Netflix will not experience buffering. Even Google, which offers a 1Gbps download service can't guarantee that. And that's because there could be congestion on other networks that the content must use to get to you. But if you have multiple people with multiple devices all using the network at once, then a faster broadband connection is beneficial.

It would be wonderful if ISPs could control the entire Internet experience for subscribers. But the Internet doesn't work that way. It requires a certain level of partnership among the different network providers. That's why we have agreements with big video providers, like Netflix. We work with them and intermediaries to ensure there isn't congestion. That's why some streaming services may work better than others at different times.

The problem is not congestion on Verizon's network. The problem happens at the hand off between the networks. The links that Netflix is using to hand off to Verizon are not up to snuff. This whole phenomenon of streaming video is relatively new. And as the technology changes, we will adapt. It's amazing that it's all worked as well as it has so far.

Let's talk more broadly about some of these public policy issues that have come up. There's been a huge public outcry over an FCC proposal to reinstate Net neutrality rules that may allow for a so-called Internet "fast lane." Is this a service that Verizon plans on offering?Young: All network providers have had the capability to do traffic prioritization for decades. The technology has existed for a long time. And yet it hasn't happened in the commercial marketplace. Why? Maybe it's because there isn't a demand or need for it, because there hasn't really been an issue with network congestion. The best-effort Internet has been good enough for delivering the services that people use. So I think this whole panic over a "fast lane" is a little misplaced, because I don't see any applications today that need that type of prioritization.

Is this a service that may be necessary to deliver high capacity content, like a 4K video service?Young: I don't think so. The best-effort Internet is even good enough for 4K video streaming. Ten years ago no one would have believed what we are able to do on the Internet today. And yet it's happening. And innovation will continue. We will find new ways to make it work as network speeds and demand for data increase. And we can do this without prioritizing network traffic.

But something that is important to note and shouldn't be ignored is that while we haven't seen any apps that could benefit from that kind of prioritization today, there may be apps in the future that might be of real value to people that require prioritization. We don't know what those applications might be, and I don't think we should be precluded from ever implementing it for fear that any type of traffic prioritization is evil.

FCC Chairman Tom Wheeler has said he won't allow any "priority" service that slows down or degrades traffic from other sources. Is that even possible to do if some of the traffic is prioritized?Young: It depends on how you define what it means to slow down or degrade a service. If you're talking about adding an extra millisecond to the performance of an app, that is technically slowing it down. But is it noticeable to real people?

Can you offer an example of when it might be OK if a service is slowed down because another one is prioritized?Young: We are starting to see a lot of network connected devices coming online. And some of these devices are going to generate a lot of data, which could compete for resources on the same network as services that actual people are using. And when people use the Internet, we expect our service to be snappy and our applications to react quickly.

So if traffic from humans is competing for space on the network with traffic from machines, maybe we'd prioritize the traffic from humans over the machine traffic. Let's say you have a Coke machine connecting to a broadband network. Maybe it would be OK for that machine to take two seconds longer to send its data, so that the man using his cell phone to look up an address to a restaurant isn't affected.

That's just one example. We don't know how this type of service could play out. But I don't think we should prejudge it. I think it's a reasonable standard to say we will ensure that whatever prioritization happens on the network doesn't harm people. But to say that a prioritized service will have zero effect on the Coke machine traffic may not be necessary, especially if someone is willing to pay a lower price for being at the bottom of the priority list.

About the author

Marguerite Reardon has been a CNET News reporter since 2004, covering cell phone services, broadband, citywide Wi-Fi, the Net neutrality debate, as well as the ongoing consolidation of the phone companies. E-mail Maggie.
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